The quest for IT talent

Aristocrat Leisure CIO, Angelo Grasso, is developing a career mapping methodology.

Read more about finding and fostering IT talent.

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That noise you hear is the scrape of chairs being pushed back, laptops snapping shut and your ICT staff walking out the door. The war for talent is on again — if it ever stopped — and as with all wars, there will be victors, survivors and casualties.

Identifying, retaining and developing talent never gets easier. There are only degrees of difficulty. What should you do to attract and groom good people? How can you make your IT organisation one that offers interesting roles and compelling career prospects? How can you avoid becoming collateral damage in the war?

How much it really costs to replace staff

First, the bad news.

Recruitment specialists, Chandler MacLeod, say the cost of losing an employee in their first year is about three times their annual salary, plus the hire cost of about 30 per cent — a total loss of up to $165,000 for somebody on $50,000. Multiply this by the number of staff lost over a year and many companies get indigestion.

Chandler MacLeod says in addition to the direct and indirect costs of hiring — advertising, screening, interviews, equipping, administration, orientation and training — you must also factor in the financial burden of separation (legal costs and severance payments), lost productivity, interrupted client relationships, impact on team morale, and disruptions to core business activity. Ouch!

The market is on the move

Now, even worse news.

Peoplebank is Australia’s largest IT&T recruitment company. It claims a talent pool of more than 300,000 candidates and 3000 contractors on-site, and places 6000 candidates every year.

Peoplebank’s National IT Market Update: April 2010 reveals significant salary increases — the first sign of increased competition among employers for IT skills — are beginning to emerge. It supports anecdotal evidence of shrinking talent pools around the country.

Jeff Knowles, acting chief executive officer of Peoplebank, says in Victoria alone, the number of jobs available has grown by 100 per cent in the past three months. “Tellingly, we’re also finding candidates have several options,” says Knowles. “A year ago, each candidate would have one role or assignment offered at a time. Today, they are choosing between two or more, or are dropping out from the selection process because they’ve taken a job elsewhere.”

Knowles says the skills shortage will lead to more volatility. As the shortage worsens, contract rates will continue to rise, tempting many into contract work, especially those who feel they were poorly treated during the global financial crisis.

“Peoplebank is already fielding calls from many such workers, and we are acutely aware it won’t take much of a pay increase to tempt them from their permanent roles. What companies do now to reward and acknowledge their IT staff will be critical in each worker’s decision to commit to a business or move on.”

The Peoplebank IT&T Salary Index is based on IT&T job offers and employment activity over the past three months. Taking just the Sydney market, the number of roles available has grown by 30 per cent for permanent opportunities and 20 per cent for contract roles. You need only follow the money to see where it’s all heading. For example, an intermediate level applications architect can now expect a base salary of $130,000 or a daily contract rate of $800. For a senior enterprise architect, it’s $160,000 or $900 per day. A senior project manager commands $140,000 or $750, service delivery managers expect $160,000 or $700, and senior IT managers about $180,000 or $1000.

CIOs expect a base salary of $350,000 or $2500 per day, according to the index.

Next: Weapons to use in a talent war

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

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